Malls Add Services to Keep Customers

By NANCY KENNEDY

Published: October 17, 1993

HOLD on to your credit cards. New Jersey shopping malls, trying to cope with challenges ranging from warehouse clubs to television home-shopping channels, are scrambling to keep their status as consumer icons.

As any serious consumer can attest, the number of places to spend an allowance, a paycheck or an inheritance seems to have risen sharply. Warehouse clubs and large specialty stores like Ikea, with its home furnishings, and Staples, which sells office supplies, are moving into existing retail space along the state's busiest corridors. Discounters and outlet stores have taken a firm hold as well. Easy-access strip centers are enjoying a resurgence with time-starved New Jerseyans.

To lure shoppers back into their climate-controlled environs, many malls -- some dating to the 1950's -- are expanding and renovating. Others are trying to be more savvy by luring hot tenants like Nordstrom and the Disney Store.

Still others are finally becoming aware that many customers want more service and better security as much as selection and bargains. The Menlo Park Mall, for example, has wheelchairs and strollers, emergency diaper kits and a mall-walkers' club, whose members exercise by circling the interior of a mall before the stores open.

When customers asked for recycling bins in the food court, they got them, said Alice Rosen, Menlo Park's marketing manager. Menlo Park, one of the earliest malls at 30 years old, is in its second year of operation after an 18-month shutdown for rebuilding.

Last month, the Quakerbridge Mall, in Lawrence Township, began offering year-round valet parking after the service proved popular during the holidays, said its marketing manager, Lisa Stezzi. And earlier this year, Bridgewater Commons instituted a smoke-free environment -- a bold move that other malls have adopted.

For enhanced safety, Menlo Park brightened lighting to eliminate dark corners. A Lawrence Township police officer is now stationed at the Quakerbridge Mall, which executives say played a part in reducing auto theft at the mall by 80 percent compared with a year ago.

Hit by recession and an accompanying real estate decline, new shopping-center construction starts in New Jersey declined to just eight in 1992, from 56 in 1989, according to the International Council of Shopping Centers.

New Jersey is home to about 978 shopping centers -- groupings of stores that have central management -- and generally the largest shopping centers are considered malls. Of the total shopping centers in the state, 35 are enclosed malls, putting most residents within a half-hour's drive of at least one mall, if not several. There hasn't been a new mall constructed in the state since 1990, when the Freehold Raceway Mall opened its doors on the site of a former race track.

Many retail analysts argue that the state has all the malls it can support. The decline of mall development as a profitable venture might be the biggest constraint. "The retail market used to be more development driven; today, the money is in management," said Keith Foxe, the spokesman for the shopping-center council. Shopping-center management companies receive not only rent but also a percentage of their tenants' profits.

Some experts trace the malls' extra efforts at luring shoppers to 1988, when Bridgewater Commons, the second-to-last mall to open in the state, had its debut in central New Jersey.

"Bridgewater Commons made all the other malls in the state look tired," said Prof. James W. Hughes, associate dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

"Malls began to see that new players could come on the scene and take business away." 'Siren Call' of Affluence

Retail developers have long heeded New Jersey's siren call. Residents' personal annual income, at $26,457 per capita in 1992, continually outshines the national average of $19,841. The state is home to four of the country's 10 highest income areas, said Tom Brown, an economist with the State Office of Economic Research.

Developers tend to place their malls in these strategic trade areas of high household income. The average household income of an Echelon Mall shopper is about $50,200, said Monica Carassa, the marketing manager at Echelon, which is in Voorhees. In Somerset County, home to Bridgewater Commons, average household income tops $58,000.

Low vacancy rates among retail properties attest to the fact that retailing is still a viable business. Overall retail vacancy rates today stand at just 10 percent, according to the shopping-center council.

"An office-building developer would think he'd died and gone to heaven to see just 10 percent vacancies in his buildings," said John M. Gilchrist Jr., the chief executive of the Hahn Company, the San Diego-based developer of Bridgewater Commons.

Vacancy rates at malls, at about 5 percent, are the lowest in the retail industry. "Malls tend to be more stable because of their size," Mr. Foxe said. "If two out of 100 stores leave, it doesn't discourage potential tenants." The Profit Potential